The CEO of one of the country's top commercial property firms
says the industry is turning the corner, and a Texas real estate
economist agrees.

"It's evident that the market has started some kind of
recovery," John Santora, president of real estate service firm
Cushman & Wakefield's Americas division, said Thursday.
"Overall, the fundamentals either improved in the second half of
2009 or the deterioration began to slow.

"From a leasing perspective, the market came back in the second
half of the year," Santora said at an economic forecast seminar his
company sponsored Thursday morning in Dallas.

While companies are taking advantage of lower real estate costs
to do long-term deals, the outlook for commercial property owners
is still troubled, he said.

"Many landlords are still facing liquidity issues, particularly
owners who purchased properties at the peak of the market," Santora
said. "Their equity is gone."

That will mean bargains for new buyers, he said.

"You are going to see some great opportunities to acquire assets
in the next year and 24 months," Santora said. "And from everything
I hear, there is enough money on the sidelines.'

Dallas' downtown area has double the office vacancy of most
other major cities, he said, but the rest of the commercial
property sector is in much better shape.

Mark Dotzour, chief economist for the Real Estate Center at
Texas A&M University, told real estate executives that that the
commercial market should be in full recovery by next year.

"In 2012, if you are not in the market, you are going to be too
late," said Dotzour, who predicts investors will snap up
buildings.

"There are billions of dollars of dry powder sitting on the
sidelines itching to go," he said. "You have people out there ready
to fire all kinds of cannons at real estate."

Banks holding back on property foreclosures are delaying the
market comeback, he said.

"If the banks would put that property out on the market, you'd
see a massive resurgence of transactions, and you'd see prices firm
up," Dotzour said. "But the financial system is not solvent enough
to let that happen."

He predicts that the commercial property sector will go through
a period of little or no construction.

"The bottom line is we are not going to build anything in this
country for the next three years," Dotzour said.

But that may not help some owners who paid too much before the
downturn. "If you bought anything in 2006 or 2007, you made a
mistake."